The construction unemployment rate rose to 4.4% in December. Unemployment across all industries declined from 3.6% in November to 3.5% last month.

“This employment report indicates that contractors collectively remain in expansion mode despite rising costs of capital and fears of recession,” said ABC Chief Economist Anirban Basu. “Consistent with upbeat assessments of construction activity late last year, nonresidential contractors continue to ramp up staffing in the context of elevated backlog. In ABC’s Construction Confidence Index, contractors indicated that both sales and employment would continue to rise over the next six months.

“There was additional good news emerging from the overall U.S. economy,” said Basu. “Though the labor market remains strong and job creation persists, there are indications that wage pressures are easing. Nonetheless, the Federal Reserve will continue to raise interest rates to restore inflation to its 2% target, with the implication that a recession remains a real possibility in 2023. Based on historical precedent, that could produce more challenging times for contractors in 2024 and/or 2025.”